Monday, 31 August 2015

The insurance damages at Tianjin Port are anticipated to cost as much as US$1.6 billion as a result of the catastrophic explosions that blew apart a logistics area at the port on August 12, 2015, according to World Maritime News.

The explosion has now killed 116 people and the cause of the explosion is still unknown, but sources speculate that the blasts could have been caused by a shipment of explosives that had been detonated after hazardous materials ignited.

The insurance valuation has been based on the idea that if there were up to 12,000 cars situated at the scene of the event, and each car coast around U$30,000 to build, the total insurance cost for these assets alone would be approximately $300-360 million.

Reinsurance intermediary, Aon Benfield, said:“Given the complexity of the loss, which is expected to involve multiple risks across marine and non-marine lines, and the situation on the ground for the affected area, it will be some time before provisional loss advice will be released by many cedents.”

Fitch Ratings said: “While insurers could recover a portion of their property claims from their reinsurers, their exposure, the amount of retention and the number of reinstatements under the catastrophe reinsurance program are likely to determine the degree of severity to which they are affected. Fitch estimates that the overall risk cession ratios of major non-life players active in the Tianjin region range from 10% to 15%.”

11 government and port officials have been accused by the Chinese government of negligence in relation to the blast which obliterated Tianjin Port on August 12, 2015, according to the BBC.

The officials linked to the blast have been taken into custody on suspicion of setting up a hazardous chemical warehouse, with the help of the officials who passed safety checks, without any guarantee that the area was safe.

The site was said to have broken all safety regulations, despite plans to erect the new warehouse at the port, presumably as a result of those suspected prioritising profits over safety.

Some officials have been named, and include Ruihai Logistics’ Chairman, Yu Xuewei, and Vice-Chairman Dong Shexuan, as well as various finance, safety and operations managers.

So far 139 people have been killed in the blast, with several hundred injured. The cost to insure the incident is well over a billion dollars.

Sunday, 30 August 2015

PTI recently interviewed one of the most dynamic and innovative figures in the port and terminal industry, Managing Director of TBA, Dr Yvo Saanen at TOC Europe 2015 in Rotterdam.

In a wide ranging interview Dr Saanen highlights the burgeoning automated terminal and how its increasing prominence is evolving the landscape of port and terminal operations.

Dr Saanen believes the industry was only waking up to automation in 2014, and 2015 has seen it become an established and exciting part of the present, with big developments to come in the near future.

In the video interview, Dr Saanen also covers the spectrum that TBA are offering the industry. Recent developments include TBA'sIntelligent App Platfrom as well as the Netherlands-based company's famed simultaed training games.

CHINA Shipping Container Lines (CSCL) first half profit fell 97 per cent to CNY19.1 million (US$2.9 million), drawn on revenues of CNY15.9 billion, a decline of 8.1 per cent year on year.

The CSCL decline was attributed to weak freight rates on Asia-Europe and Mediterranean trade lanes and excess capacity that depressed revenue.

"Freight rates for Asia-Europe trade lanes hit record lows under the impact of new shipping capacity put into market amid a weak economic growth momentum in the eurozone," said CSCL.

China Shipping's adjusted its capacity in a bid to cope with declining international container volumes in the first half. By the end of June, CSCL had carried nearly four million TEU, up one per cent year on year.

That increase was attributed to a 12.2 per cent rise in intra-Asia trade where the carrier transported one million TEU.

All other trades suffered declines. CSCL carried 743,647 TEU on Asia-Europe and 614,021 TEU on the transpacific.

Low oil prices and currency factors affected operating costs. Container and cargo costs fell 9.2 per cent, mostly because of a weaker yuan. Vessel and voyage costs declined 10.7 per cent and cheaper oil brought down the costs of logistics 28 per cent.

But CSCL's outlook was gloomy: "In second half, international trade still won't be cheerful. With the massive influx of new shipping capacity, shipping market will face even more uncertainties."

"Thresholds of market entry and service standards will continue to rise along with the increasing scale of container liners, innovations in large vessel operations and in service concepts," said the company statement.

In the filings to the Hong Kong stock exchange, no mention was made of the ongoing discussions between CSCL and Cosco on merging the two container divisions. The shares of CSCL, China Shipping Development, China Cosco Holdings and Cosco Pacific remain suspended as the merger talks continue.

CHINA Cosco Holdings posted a 183 per cent increase in first half net profit to US$295 million, drawn on revenues of $4.6 billion which declined 7.9 per cent year on year.

CHINA Cosco Holdings posted a 183 per cent increase in first half net profit to US$295 million, drawn on revenues of $4.6 billion which declined 7.9 per cent year on year.

China Cosco benefited from $600 million in subsidies from Beijing for scrapping older vessels without which the state-owned enterprise would have ended the first half in the red.

Most of China Cosco's revenue came from the Asia-US trade that grew 20 per cent to $1.3 billion. Asia-Europe fell seven per cent to $819 million.

Volumes carried by China Cosco's container unit Coscon in the first half increased 6.8 per cent year on year to 4.8 million TEU, with revenue per TEU falling 1.7 per cent to $677.

China Cosco had 185 container vessels with a capacity of 879,070 TEUs, up 10.7 per cent year on year.

China Cosco said it had benefited from lower bunker costs during the first half.

China Cosco operates a fleet of 220 bulk carriers with a total capacity of 22.15 million dwt and a further 40 bulkers with 3.47 million dwt combined capacity on order. It also has 185 containerships with a total capacity of 879,070 TEU and another 10 units of 117,960 TEU in capacity on order.

In the filings to the Hong Kong stock exchange, no mention was made of the ongoing discussions between CSCL and Cosco on merging the two container divisions. The shares of CSCL, China Shipping Development, China Cosco Holdings and Cosco Pacific remain suspended as the merger talks continue.

US – It seems the recently resolved dock labour problems which once again crippled US ports on the West Coast may have engendered some action in an attempt to restore confidence. Las week the Port of Oakland sent an open letter from Executive Director Chris Lytle to the Federal Maritime Commission (FMC) following a request from the port’s terminal operators to enable them to work on Saturdays, loading import and export containers to and from trucks and adding a sixth day to the working week to allow freer movement of freight.

The Port boss said opening terminal gates on Saturdays could ease congestion and improve efficiency in Oakland adding however two caveats, namely that the shortage of labour which has already slowed cargo operations be resolved, and that the fee necessary to fund Saturday operations must be reasonable and used exclusively for those operations.

The FMC is currently reviewing the request lodged by the container terminals at a port which already opens its gates at weekends but generally only to allow admittance for vessel operations, rarely for other activities. The new arrangement would open terminals every Saturday for full operations, including gate entry. That would enable harbour truckers to pick-up containerised imports for delivery, drop-off exports or return empties. Mr. Lytle commented:

“The Port strongly supports additional gate hours. There are, however, several points for the Commission to consider.”

Although some West Coast ports are already more flexible than Oakland many of the larger terminal operators,APM Terminals in Los Angeles for example, are closed for the whole weekend. Although the Port of Oakland doesn’t operate marine terminals it publicly supports Saturday working as part of a broader plan it has developed to speed up cargo delivery, with offsite locations to collect empty containers and a common pool of container chassis for harbour truckers.

The elephant in the room is of course the labour situation, a shortage of staff seriously reduced productivity throughout the summer, slowing the post dispute recovery, and the port is first to state that more dockworkers are needed to ensure Saturday operations can be successful.

THE International Longshore and Warehouse Union (ILWU) contends the data published in the annual reports of the employers' Pacific Maritime Association (PMA) on dockers' wages is overstated.

That's because the PMA cites the wages of the most senior longshoremen, says the ILWU, which won a seven per cent increase for its members to US$146,517 a year when many more lower paid men make only $73,000 a year.

But that's still more than the $64,000 - $67,000 a year earned by degree-holding hospital resident physicians, an assistant district attorneys and FBI agents.

ILWU clerks who worked at least 2,000 hours earned on average $165,202, also seven per cent more than in 2013, notes Newark's Journal of Commerce. That was also the highest jump in earnings over the past decade.

Walking bosses earned an average of $230,003 for 2,000 or more hours of work. That was an increase of eight per cent over 2013 and their second highest increase of the past decade after their 12 per cent increase in 2010.

ILWU spokesman Craig Merrilees said that employers who earn "a million dollars a year and generous benefits are hardly in a position to lecture dockworkers about good-paying jobs".

The PMA conceded that the straight wages is confusing and addressed the issue by answering the question, "How does $36.68 an hour add up to nearly $156,000 a year".

The report stated that the hourly wages of many longshoremen include the base wage, plus "multipliers" such as skill bonuses, overtime and weekend work, reported Newark's Journal of Commerce.

"In fact, 90 per cent of all hours paid to registered workers in 2014 were subject to multipliers that enhance earnings significantly," the PMA said.

Eighty per cent of all work includes skill bonuses ranging from $2.40 to $5.80 an hour. Evening and night work, which accounts for 39 per cent of all hours paid, commands a rate of $49 to $68 an hour.

Overtime work, including weekends and holidays, pays $55 to $77 an hour and accounts for 34 per cent of all hours paid. In short, "the effective average rate for all hours paid is more than $50 an hour, the PMA annual report stated.

Furthermore, some job classifications guarantee 50 hours of pay each week for 40 hours of work. Marine clerks, steady foremen and steady crane drivers are guaranteed 50 hours of pay when they work 40 hours.

About 30 per cent of dockers were paid 2,600 or more hours in 2014. The PMA also noted that registered longshoremen are also paid an average of $6,000 a year in vacation time and have 13 paid holidays.

Friday, 28 August 2015

Preliminary investigation shows that the fire erupted in container or containers on board of the vessel early this morning. Firefighting teams reached the scene at 3:30 a.m. local time and managed to put the fire under control.

Alula (IMO 9525883) was built in 2012. The Malta-flagged vessel has a capacity for 13,100 TEUs.

UASC containership catches fire in Port of Hamburg

A fire broke out in a container onboard the United Arab Shipping Co. vessel Alula in the early hours of Friday morning as it arrived at Waltershof harbor, according to a statement from the city of Hamburg, Germany.

A fire broke out in a container onboard the United Arab Shipping Co. vesselAlula in the early hours of Friday morning, according to a statement from the city of Hamburg, Germany. The 2012-built Alula was arriving at Waltershof harbor in the Port of Hamburg when the fire began in a container filled with cardboard bales. The city said a team of 36 firefighters were dispatched to the scene and were able to extinguish the blaze by around 3:30 a.m. local time. Before the fire department could begin its work, 30 other containers had to be unloaded in order to gain access to the box in which the fire began. The 40-ft. container was then offloaded onto the dock where firefighters could safely put out the fire, which had been smoldering, the city said. According to ocean carrier schedule and capacity database BlueWater Reporting, the Malta-flagged Alula has a capacity of 13,470 TEUs and deadweight of 145,327 metric tons. The ship serves on the Asia-North Europe AEX1/AEC1 operated by the Ocean3 Alliance of UASC, CMA CGM and CSCL and would have been en route to Hamburg from Port of Rotterdam in The Netherlands. The AEX1/AEC1 is operated with 12 vessels with an average capacity of 17,229 TEUs. The loop has a full port rotation of Qingdao, Shanghai, Ningbo, Yantian Shenzhen, Port Kelang, Felixstowe, Rotterdam, Hamburg, Zeebrugge, Rotterdam, Port Kelang, Yantian Shenzhen, and Qingdao. German carrier Hamburg Sud and its subsidiary Alianca purchase slots on the AEX1/AEC1 along with Evergreen Line, Hanjin, Yang Ming, and CMA CGM subsidiaries ANL, Delmas and US Lines. The city of Hamburg said no other cargo onboard the vessel appeared to sustain any damage as a result of the incident.

The 2012-built MS Alula, operated by United Arab Shipping Company (UASC), was arriving to Waltershof harbor in the early hours of Friday, August 28, when the fire was noticed and the authorities were notified.

36 firefighters were sent to contain the blaze aboard the boxship. Some 30 containers had to be discharged for the firefighters to access the burning container, which was taken ashore and the fire was put out at around 3:30 am, local time.

The 40-foot container was reportedly loaded with stacks of cardboard. The other cargo aboard the 349.5-meter boxship was reportedly unaffected by the fire.

London Thamesport has set aside an area of 40 acres (16 ha) for future development of container operations and the further provision of Port-centric facilities.

Adjacent to the port, a 405 acre (164 ha) brownfield site has recently received outline planning permission for development of warehousing, distribution facilities and other Port related activities. This site provides an exciting opportunity to develop purpose-built distribution facilities at one of the UK’s leading container ports.

The Thamesport Interchange is an independent investment opportunity offered by the National Grid and has recently received outline planning permission to build 5 million sq ft of logistics related facilities. A private road linking the facilities to London Thamesport is planned to further develop the number of port-centric opportunities available to Port users.

Additionally, in close proximity to the Port there are a number of other development projects proposed that will offer to third parties the opportunity to provide logistics solutions to end-users.

The nearby Kingsnorth Logistic Park site is also an independent development with recently approved planning permission, and will soon offer additional warehousing and distribution facilities.

London Thamesport has welcomed news that A2B-online is to introduce a new service from Moerdijk in the Netherlands

17 January 2014

London Thamesport Welcomes A2B Moerdijk Service
London Thamesport has welcomed the announcement of a new short sea container shipping service by A2B-online, the Dutch-based transport company specialising in full load, part load and pallet consignments to and from the United Kingdom, Benelux and Germany.
The new container shipping service, which will commence on 28 January 2014, will offer three sailings a week to the Dutch port of Moerdijk. Sailings will be provided by the 340 TEU m.s.Expansa.
Commenting on the new service, Clemence Cheng, Chief Executive Officer of Hutchison Ports (UK) Limited, owners of London Thamesport, said:
“London Thamesport offers its customers a service tailored to their specific demands. A2B-online have made clear their need for an exceptional level of service, which is what we pride ourselves on and which we are ready and able to provide.”
Gerard de Groot, A2B-online Container’s Managing Director, added:
“This is a magnificent moment for all of us. It is fantastic to see that our initial service that we started last summer has been picked up by so many customers which enables us now to start up this new route to London Thamesport.
“Naturally we have investigated various options. Besides fast turnaround times at the terminal we need an efficient and effective ships operation as well; that is why we decided for London Thamesport. It is furthermore our intention to add one additional sailing per week after three months, meaning servicing London Thamesport four times a week. That is the advantage of London Thamesport: no locks to go through, shorter crossings and quick handlings of the ship.”
A2B-online’s main shareholder, Kees Vierhouten of the Vierhouten Group, is also very pleased with the latest development of the Container Division of A2B-online. Commenting on the division, he said:
“It is a good product, the knowledge and expertise which is available is great and in conjunction with the Trailer Division we are developing a sustainable logistics company in primary transport, that is our objective.”

Look at their shipping list and reflect how lucky we are to have the massive amount of ships at Felixstowe on a daily basis.

Krispen Atkinson, Principal Analyst at IHS Maritime & Trade, said: “These increases will not be the double-digit rises seen before the 2008 global economic crisis. However, an increase of over 30% in the next five years underscores China’s intent to remain a new trade hub-and spoke lynchpin for the rest of the economic world, cementing the Maritime Silk Road Initiative via China and Asia within the emerging market universe.”

One new trend is the move towards larger container ships to streamline the supply chain. The four alliances that dominate east-west trade are pushing the trend towards containerships capable of carrying 20,000 TEU, in their quest to reduce unit costs with ever more efficient vessels.

“China may be the major powerhouse in the region, but Southeast Asia is making significant headway,” Atkinson said.

Vietnam’s exports are estimated to increase by 44% by 2020. IHS forecasts a 44% increase in trade between Vietnam and North America and a 43% increase in trade between Vietnam and Europe in the next five years.

Atkinson continued: “In terms of actual cargo, the figures are still low when compared with China’s, but these are still huge jumps for these economies.

Trade routes from China to Africa are expected to see a marked increase over the next five years, with the highest growth expected to be seen from the East African to China route, incorporating Malawi, Mozambique, Zambia, and Zimbabwe.

Atkinson concluded: “Trade between East Africa and China is expected to increase by 91% by 2020. It’s all around manufactured goods. East Africa is becoming a new hub for the Chinese.”

Asian Trade Boom Predicted

Trade from China and Southeast Asia to North America and Europe is expected to boom in the next five years, according to new analysis released by IHS Inc.

The firm forecasts that China’s trade will continue to increase by more than five percent per year between 2015 and 2020. This positive medium-term trade growth comes despite more recent setbacks caused by the marked economic slowdown in China and weaker growth among other emerging markets in the current and near-term.

“These increases will not be the double-digit rises seen before the 2008 global economic crisis,” said Krispen Atkinson, principal analyst at IHS Maritime & trade. “However, an increase of over 30 percent in the next five years underscores China’s intent to remain a new trade hub-and-spoke lynchpin for the rest of the economic world, cementing the Maritime Silk Road Initiative via China and Asia within the emerging market universe.”

Bigger ships

One new trend is the move towards larger container ships to streamline the supply chain. The four alliances that dominate east-west trade are pushing the trend towards container ships capable of carrying 20,000 boxes (20 foot equivalent units), in their quest to reduce unit costs with ever more efficient vessels. Current container ships hold around 13,000 boxes, so the new super-containers capable of transporting over 50 percent more cargo. Their push has meant further capacity has become available in the trade.

Southeast Asia-North America trade boom

“China may be the major powerhouse in the region, but Southeast Asia is making significant headway,” Atkinson said.

Vietnam’s exports are estimated to increase by 44 percent by 2020. IHS forecasts a 44 percent increase in trade between Vietnam and North America and a 43 percent increase in trade between Vietnam and Europe in the next five years. “In terms of actual cargo, the figures are still low when compared with China’s, but these are still huge jumps for these economies,” Atkinson said.

Trade between these two regions is made up of manufactured goods, such as home appliances or mechanical hardware.

“Vietnam, India and many of the South Asian economies stand to benefit from recent energy and commodity price falls as net importers of these goods,” said Jan Randolph director of sovereign risk analysis at IHS. “They have significant industries and services sectors of their own that benefit from cheaper inputs and have currencies that are not coupled to a strengthening US dollar.”

East Africa-China trade boom

Trade routes from China to Africa are expected to see a marked increase over the next five years, with the highest growth expected to be seen from the East African to China route, incorporating Malawi, Mozambique, Zambia, and Zimbabwe.

“Trade between East Africa and China is expected to increase by 91 percent by 2020,” Atkinson said. “It’s all around manufactured goods. East Africa is becoming a new hub for the Chinese.”

Chinese leadership has publicly announced its commitment to develop infrastructural and to promote regional integration in East Africa. “In the coming years, China’s relationship with East Africa will change,” said Natznet Tesfay, head of sub-Saharan Africa analysis at IHS County Risk. “Right now, the focus is on importing raw materials and exporting manufactured goods. But, Chinese investments in enhancing regional interconnectivity will enable it to take advantage of comparatively lower operational costs and to onshore manufacturing activity in East Africa.”

Thursday, 27 August 2015

Hutchinson Ports Australia (HPA) said in a clarification that the recent laying off of 87 staff via text messages and emails, that was fiercely criticized by the unions, was preceded by careful consideration and extensive face-to-face consultation.

In addition, HPA claims that the text message and email communications are an agreed means of quickly sharing information between the company and staff, in line with the Enterprise Bargaining Agreement (EBA).

“There have been several face-to-face meetings and written communications to staff and the MUA during the period between June 26 and August 6 before staff were informed in a text message to check their emails for details on the next steps in the process and the face-to-face meeting about the redundancy program. The company took feedback from employee representatives regarding the selection process for the redundancy program and modified the program accordingly,” saidHPA’s General Manager of Human Resources, Harriet Mihalopoulos.

Mihalopoulos voiced the company’s readiness to engage in dialogue with the workers in an attempt to find a solution for the industrial dispute in order to rebuild its operations in Sydney and Brisbane, adding that it has put forward “a number of ways of resolving the current impasse”.

The proposals have not resulted in a binding agreement so far.

HPA, a subsidiary of the Hong Kong-based Hutchison Port Holdings, closed its Sydney and Brisbane terminals and stopped all activities after sacking around 100 out of its 224 dockworkers via an email sent around midnight August 6, local time.

The move was followed by workers’ outrage and protests and subsequent involvement of the Fair Work Commission ordering workers to stop the protests.

On August 14th, the Australian Federal Court granted a temporary injunction preventing Hutchison Ports Australia from making the workers redundant and ordering the workers should return to work at least until the full hearing of the dispute scheduled for August 31.

“As a result of this, HPA is now considering all of its options ahead of the Federal Court hearing on September 1st,” Mihalopoulos added.

“Workers sacked by midnight text and email nearly three weeks ago by Hutchison Ports Australia will take their campaign to the streets in three capital cities today to join the #BigLittleProtest run by Vodafone Australia – which is half owned by Hutchison,” the Maritime Union of Australia (MUA)informed today.

MUA added that it would again meet with Hutchison management at the Fair Work Commission in Sydney today ahead of the Federal Court case that begins next week.

British Labour Party leadership hopeful Jeremy Corbyn has expressed solidarity with the Hutchison workers

Hutchison defends itself over text message sackings

Hutchison Ports Australia (HPA) has claimed that “severe financial pressures” forced it to make “hard decisions”, which included the redundancies of 97 port workers, who were initially informed by text message.

Ahead of a Federal Court hearing on 1 September, the terminal operator has faced stinging criticism from workers and the Maritime Union of Australia (MUA) for its handling of the process.

Ninety-seven of its 224 port workers in its Sydney and Brisbane terminals were sacked by text message and email on 6 August, although a Federal Court judge has since granted temporary orders to prevent the redundancies being implemented until the hearing.

The company said that it had “been incurring substantial losses in Australia after finding it extremely difficult to break into the current duopoly in the Australian market”.

HPA has invested AU$700m (US$496m) in the Australian operations since June 2013 and made an AU$87m (US$62m) loss for the 2014 calendar year.

General manager of human resources at HPA, Harriet Mihalopoulos, said: “The company has maintained its position that unfortunately due to severe financial pressures it has had to make some hard decisions about the Australian operations.”

She added that the company is still prepared to engage in a dialogue about the redundancy program in an attempt to rebuild its operations in Sydney and Brisbane.

Mihalopoulos also said that extensive consultation with staff and unions regarding possible redundancies had dated back to 26 June. According to her, there were several face-to-face meetings and written communications to staff and the MUA during the period between 26 June and 6 August.

She disputed accounts of the text message sackings, adding: “Staff were informed in a text message to check their emails for details on the next steps in the process and the face-to-face meeting about the redundancy program. The company took feedback from employees and employee representatives regarding the selection process for the redundancy program and modified the program accordingly.”

Mihalopoulos stated that an Enterprise Bargaining Agreement (EBA) negotiated by HPA and the MUA had made text message and email an agreed means of communication between the company and staff.

She added: “The texts and emails were not sent in isolation, they were preceded by lengthy consultation and followed by proper processes. In addition to the text and emails, letters were also posted to the workers on the same date.”

In response to the sackings, the MUA have launched a high profile campaign featuring more than 30 YouTube videos and an endorsement from contender for the British Labour Party leadership, Jeremy Corbyn.

Speaking when the court hearing was announced, MUA national secretary Paddy Crumlin said: “Hutchison should know better than to treat their workforce like this. They are a major global player in container terminals and they know that mutual respect with your workforce delivers the best results.”

On Tuesday (25 August), it released the video below, featuring its members employed by DP World, saying: “Hutchison wharfies here to stay”.